Freight Invoice Factoring: How Carriers Get Paid on Delivered Loads
Turn a delivered load into cash before the broker or shipper pays. Nothing is borrowed.
Soft credit pull only, no obligation
Rates, factor rates, fees and terms are set by the funding provider that makes your offer and are disclosed in that provider's agreement. Figures on this page are illustrative ranges from providers in our network, not offers.
- Same-day decisions
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- Subject to provider approval and document turnaround.
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As financing for trucking and logistics companies says, most providers in our network restrict this vertical for general working capital, and factoring is the route that works every month rather than once. The mechanics across every industry — recourse, reserves, eligibility, set-up — sit on invoice factoring.
How it works on one load
The order of events is fixed, and every step has a document attached to it. A missing signature on a bill of lading is the reason an advance has not been released.
Haul the load
You accept the load and keep the rate confirmation, then get the bill of lading signed at delivery.
Invoice and submit
You invoice the broker or shipper on its normal terms and send the same paperwork to the factoring company.
The advance is paid
Once load and invoice are verified: a percentage of the invoice, agreed up front. The rest is held as a reserve.
The reserve is settled
When your customer pays, the factoring company deducts its factoring fee and sends you what is left.
Who collects: the notice of assignment
Most facilities tell each approved customer to pay the factoring company, which now owns the invoice. A broker that pays you by mistake is asked to pay again, so warn your customers first. Confidential facilities leave collection with you, at a higher fee.
Recourse or non-recourse
Both exist. Recourse costs less and leaves the loss with you if your customer never pays. Either way, it is your customer who settles the transaction, not you, which is why there is no payment schedule to meet.
Fuel advances and what else sits in a facility
The extras are worth something, and they are what makes two facilities hard to compare. Price the factoring on its own, then decide what the extras are worth.
Fuel advance
Released once a load is picked up and documented, so the driver can fuel on the way.
Not universal, with its own charge: money early, not money added.
Fuel card
A fuel card with a discount network, often bundled with the factoring.
Worth something, and it makes two offers harder to compare.
Back office and checks
Collections help, broker credit checks before you book a load, sometimes an invoice portal.
Decide what each is worth after pricing the factoring.
The fees and the exit
A fee per period an invoice is open, plus any set-up, wire or volume-shortfall fee.
Read the exit: the initial term and the notice period to leave.
What a factoring company underwrites, and why your truck is not the answer
Your customers
It reads your receivables aging and approves each broker or shipper one by one. A strong customer makes an invoice fundable; a weak one, ineligible.
Concentration: if one broker is most of your ledger, expect a cap on funding that balance.
Then you
Your operating authority's age, your safety record, whether the receivables are already pledged, and whether each load's paperwork is complete.
A blanket lien on receivables must be released or subordinated: what a blanket lien is.
Not your truck
Good collateral for an equipment provider, poor for a working-capital one: it moves, loses value every mile, is slow to recover and usually has an earlier lien on the title.
The same truck opens one door and not the other.
One load, from dispatch to settlement
Illustrative example, not an offer.
An owner-operator hauling for brokers, one line-haul invoice. The broker's credit is checked before you accept the load; the advance follows your agreement's advance rate; the reserve is the invoice less the advance; what comes back after the broker pays follows the fee schedule.
- One line-haul load, delivered and invoiced to a brokerFactored: an advance once verified, the reserve when the broker pays$2,400
Advance rates, factoring fees and reserves are set by the factoring company that makes your offer and are disclosed in its agreement.
Decisions from some providers the same day, depending on the provider. Subject to provider approval and document turnaround.
What you need to start
The application takes about 5 minutes and uses a soft credit pull only. Setting up a facility takes longer, because your customers are underwritten alongside your business.
- bank statements plus a government ID
- 3 months
- loads only, invoiced to a business or public agency
- Delivered
- and current: an invoice already in dispute is not eligible
- Undisputed
- owed by a customer the factoring company has approved
- Approved
Meeting a minimum does not guarantee an offer. Acceptance is specific to each factoring company: a receivable one declines is routine for another that specializes in freight.
Bring, on top of the statements
- Your accounts-receivable aging report
- A list of the brokers and shippers you want to factor
- Your operating authority and insurance details
- A few recent invoices, with their rate confirmations and signed bills of lading
Capital Gurus is a broker: we present your file to factoring companies in our network and help you compare offers; the factoring company decides, advances and sets the fee. After set-up, it approves each new broker first.
When factoring is not the answer
It fits
- A gap that repeats: brokers and shippers paying on their own terms, load after load
- A young authority, good customers: the decision rests on who owes you
It does not fit
- Customers who pay on delivery: no gap to close
- Rates below cost per mile: factoring won't fix that
- A truck, trailer or major repair: an asset question
- Thin ledger, repeating gap: a business line of credit
Frequently asked questions
In short
Freight invoice factoring turns a delivered load into cash before the broker or shipper pays. You haul the load, send the rate confirmation and the signed bill of lading, and the factoring company advances against the invoice and collects from your customer. It is the realistic route for most carriers. Nothing is borrowed.
How does freight factoring differ from a loan?
Your customer settles the transaction, not you. The factoring company advances against an invoice you have already earned and collects from the broker or shipper that owes it. There is no payment schedule to budget for and no interest, because nothing is borrowed. The price is a factoring fee charged for each period the invoice stays open.
Who collects from the broker or shipper?
Usually the factoring company. A notice of assignment tells your customer to pay the factoring company instead of you, and from then on it chases and applies the payment. Some facilities are confidential and leave collection with you, at a higher fee. Ask which one you are being offered before you sign the agreement.
Will my brokers mind that I factor?
Most brokers and large shippers handle assigned invoices every week and have a process for it. What causes friction is a surprise: a notice of assignment arriving at an accounts-payable desk that was never told. Tell your regular customers before the notice goes out, and confirm the remittance details the factoring company gives them.
What is a fuel advance?
Money released against a load before it is delivered, usually once the load is picked up and the paperwork is in, so a driver can buy fuel on the way. Not every factoring company offers it, it normally applies to loads it has already approved, and it carries its own charge in the fee schedule. Ask what that charge is.
Can a new authority use freight factoring?
Often, yes, and this is the main reason factoring leads this industry. The decision rests on the credit of the brokers and shippers who owe you rather than on your own trading history, so a young authority with good customers can be eligible where a working-capital application would not be. Your safety record and your paperwork still matter.
Can I factor and still finance a truck?
Yes, and the two are underwritten by different people on different facts. Factoring rests on the receivable; truck and trailer financing rests on the titled asset. One point to watch: the factoring company files a lien on your accounts receivable, so tell each provider what the other has filed before either one funds.
Still have a question?
talk to a funding advisorCapital Gurus is not a lender. Rates, fees and terms are set by the funding provider and disclosed in your agreement. Capital Gurus · 1700 S Pavilion Center Dr, Ste 420, Las Vegas, NV 89135.
Nothing on this page is financial, legal or tax advice.
Turn your delivered loads into cash: see which factoring offers fit your freight.
about 5 minutes, soft credit pull only · talk to a funding advisor